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Rice in Asia: Is It Becoming an Inferior Good?
Author(s) -
Ito Shoichi,
Peterson E. Wesley F.,
Grant Warren R.
Publication year - 1989
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1241772
Subject(s) - agricultural economics , business , southeast asia , economics , developing country , central asia , international economics , international trade , economic growth , ancient history , history
Empirical results using time‐series and cross‐sectional data indicate that rice in Asia is becoming an inferior good. Income elasticities declined and in some cases became negative between 1961 and 1985 in most of the fourteen Asian countries studied. Accordingly, domestic demand for rice in these countries is not likely to grow as rapidly as it has in the past. As a consequence, there is a potential for excess supplies of rice to develop in Asia, putting downward pressure on rice prices. While governments in Asian countries may need to adjust their rice policies in the future, world rice suppliers may need to develop new markets for rice.